The revenue cycle for a practitioner’s practice means tracking payments and revenue collection from patients as well as insurance companies. However, the RCM process starts with patient scheduling and registration, then charge capture, insurance eligibility verification, deductible/copay collection, claim submission, claim management, patient payment collections, and the last one is reporting. We can say that the RCM process starts when a patient visits a laboratory or makes an appointment and ends when the lab practitioners get paid fully for the provided healthcare services.
For some lab practices, the responsibilities of RCM can become overwhelming with other business duties i.e, keeping up with government programs, patients’ care, and other administrative tasks. On the other hand, the recent changes in federal policies and coding regulations affects the healthcare industry in numerous ways. The Healthcare Insurance Portability and Accountability Act (HIPAA) has also had an impact, by tightening the requirements for managing the healthcare data in a secure manner.
Medical professionals are more focused on maximizing the quality of care but simultaneously, they remain concerned about collections and reimbursements. Limited resources and the shortage of advanced billing tools bound healthcare practitioners to rely on outdated/conventional practices. Using outdated methods to handle the RCM can make it challenging to take the exact financial picture of your practice, costs and spending. Simultaneously, the lack of ability to trace the revenue loopholes makes the medical accounts receivables difficult to manage.
There are several loopholes or leakage points in the RCM process, but here are the most common:
- Billing and Collection mistakes
- No referral
- Registration, billing, or coding errors
- Underpaid claims
- Unverified insurance
- Denied appeal
Without a good base on which to build RCM processes, lab practitioners will not be able to achieve the ideal functioning of revenue processes. However, staying updated on industry trends, managing denials, scrubbing, or resubmitting claims, and increasing collections are a few basic RCM activities that laboratory practices must accomplish.
But to ensure profitability and prevent the lab’s revenue leakage. The RCM strategy must follow best practices and track key billing metrics for revenue success. To do so, firstly, let’s have a detailed look, the biggest RCM challenges that can disrupt the RCM process.
Lack of digital workflow:
Honestly speaking, in order to strengthen the RCM, implementing technology within the revenue cycle is crucial.
This is the era of technological innovation. But, many lab practitioners in the US healthcare industry lack proper practice management tools and use outdated IT systems that can result in a lot of inefficiencies. Because, if no one understands how to use it accurately it will result in errors and costly mistakes.
These practice management tools are needed to track payments and address denied medical claims. If that information is not being managed properly, a lot of improperly tracked or untracked payments just end up being left behind.
Also, many lab practices are based on paperwork because they do not have the infrastructure to invest in new technology. They manually manage medical claims and denials which leave room for many errors. Consequently, not being able to implement required technologies, some lab professionals end up consolidating, while others consider outsourcing to laboratories billing companies.
If medical practitioners implement an automated billing and claims process. They have a more efficient system that streamlines both patient healthcare and payments.
Incorrect or Incomplete Patient Information:
One of the common reasons for claim denials is inaccurate or insufficient patient information. Medical billing starts when patient contact with laboratory staff. At that time, It’s the duty of your front-end staff to collect complete and accurate information from patients. For example patient name, phone number, gender, birth date, insurance ID number, etc.
If they fail to do so it will cause errors and that leads to denials and significant revenue loss. That’s why front-end staff must accurately gather all patient information to ensure all billing procedures go streamlined.
Not verifying insurance eligibility and healthcare coverage is also one of the leading causes to claim denials and delay in the reimbursement process. That generally takes much longer to correct the mistake.
So, implementing EHRs solutions and double-checking each patient’s information is one of the best strategies to eliminate these errors. However, there are many automated tools available in the market that help to automatically check on healthcare coverage and insurance eligibility. Which results in improving clean claim rates and fast reimbursement.
Lack of staff training:
Skilled and professional front-end and back-end staff is the backbone of a successful medical practice. If a laboratory staff isn’t trained properly, they might not capture patient data accurately or bill correctly.
The administrative staff that is responsible for medical billing must know how to accurately collect data from patients. And after that, how to translate that information into a successful insurance claim.
Coding regulations i.e, CPT & ICD-10 codes are constantly changing that’s why the back-end staff also need to stay updated on these changing regulations. Because if they failed to do so, they put the wrong code in the claim that results in denials.
These types of denials sometimes cause severe revenue loss for a medical practice. And even sometimes labs face federal penalties and heavy fines. According to the latest report, 25 laboratories in the US paid a 500,000$ penalty for billing and coding errors.
That’s why proper training is very necessary for both back-end and front-end staff. Although training might be time-consuming and costly but can save a lab’s revenue in the long run. We can say that skilled and well-trained staff can minimize billing errors and make the whole billing process more efficient.
With an efficient revenue cycle management process, lab practices can keep costs down and pay more focus on improving patient outcomes. By implementing the right solutions at the right time, healthcare providers can achieve a higher rate of clean claims, reduce claim denials, fewer outstanding patient payments that lead to higher revenue and profit.
If you are too busy providing quality care services to your patients and you don’t have much time to concentrate fully on billing procedures. Or you lack proper tools, skilled personnel, and a strategic action plan in place. Consider outsourcing RCM services to a professional billing organization.
However, in today’s challenging regulatory environment, there are multiple laboratories billing companies in the US. Who are enlisting a dedicated financial partner to help manage the revenue cycle. They have dedicated revenue experts who track down denials, tackle delinquent claims, and help you follow billing best practices while ensuring streamlined revenue flow.